Ueda the Unknown

Kazuo Ueda was present as a member of the Bank of Japan’s Policy Board at the birth of both the Zero Interest Rate Policy in 1999 and Quantitative Easing in 2001 and took the dovish side of arguments at the time. But he left the Board in 2005 and has not played a prominent role in public debate in the past decade. The next few days will be spent trying to figure out what he thinks now. The starting point, in our view, is that while the case for lifting the short-term policy rate is poor, Yield Curve Control is no longer effective and the ceiling it places on 10-year yields is likely to be abandoned soon.